Correlation Between Kreditbanken and Danske Andelskassers
Can any of the company-specific risk be diversified away by investing in both Kreditbanken and Danske Andelskassers at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kreditbanken and Danske Andelskassers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kreditbanken AS and Danske Andelskassers Bank, you can compare the effects of market volatilities on Kreditbanken and Danske Andelskassers and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kreditbanken with a short position of Danske Andelskassers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kreditbanken and Danske Andelskassers.
Diversification Opportunities for Kreditbanken and Danske Andelskassers
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kreditbanken and Danske is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kreditbanken AS and Danske Andelskassers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Andelskassers Bank and Kreditbanken is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kreditbanken AS are associated (or correlated) with Danske Andelskassers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Andelskassers Bank has no effect on the direction of Kreditbanken i.e., Kreditbanken and Danske Andelskassers go up and down completely randomly.
Pair Corralation between Kreditbanken and Danske Andelskassers
Assuming the 90 days trading horizon Kreditbanken AS is expected to generate 1.43 times more return on investment than Danske Andelskassers. However, Kreditbanken is 1.43 times more volatile than Danske Andelskassers Bank. It trades about 0.02 of its potential returns per unit of risk. Danske Andelskassers Bank is currently generating about -0.06 per unit of risk. If you would invest 498,000 in Kreditbanken AS on September 1, 2024 and sell it today you would earn a total of 2,000 from holding Kreditbanken AS or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kreditbanken AS vs. Danske Andelskassers Bank
Performance |
| Timeline |
| Kreditbanken AS |
| Danske Andelskassers Bank |
Kreditbanken and Danske Andelskassers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kreditbanken and Danske Andelskassers
The main advantage of trading using opposite Kreditbanken and Danske Andelskassers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kreditbanken position performs unexpectedly, Danske Andelskassers can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Danske Andelskassers will offset losses from the drop in Danske Andelskassers' long position.| Kreditbanken vs. Lollands Bank | Kreditbanken vs. Groenlandsbanken AS | Kreditbanken vs. Skjern Bank AS | Kreditbanken vs. Djurslands Bank |
| Danske Andelskassers vs. Vestjysk Bank AS | Danske Andelskassers vs. Spar Nord Bank | Danske Andelskassers vs. Skjern Bank AS | Danske Andelskassers vs. RTX AS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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